Key Stats for Applied Materials Stock
- Current Price: $375.58
- Target Price (Mid): ~$710
- Street Target: ~$628
- Potential Total Return: ~89%
- Annualized IRR: ~17% / year
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What Happened?
Applied Materials (AMAT) closed at $375.58 on Oct. 22, 48% below its peak, per TIKR. At its Oct. 13 investor breakfast, management said one business is growing about 50% in 2026: process control, the inspection and measurement tools where KLA (KLAC) is the incumbent.
The Oct. 22 session alone cost 8.16%, as Lam Research (LRCX) flagged supply constraints and chip stocks sold off broadly. That drop deepened a decline that began well before the investor day.
A $3 Billion Process Control Business Growing 50%
Keith Wells, head of Applied’s Imaging and Process Control Group and a 27-year KLA veteran, said optical inspection and eBeam revenue are each growing about 50% from 2025 to 2026. He put Applied’s eBeam revenue at roughly twice its nearest competitor’s. He also said the group expects about $3 billion of systems and service revenue in 2026.
Optical inspection is the opening. Applied serves only about $2 billion of a $9 billion market, Wells said, adding, “Customers want alternatives.” In advanced packaging, he said, optical inspection has grown from a few hundred million dollars a couple of years ago to well over $1 billion, because chipmakers want to check every die before placing it.
These are management’s figures, and Applied does not break out process control revenue in its reported segments. When Citi’s Atif Malik called the packaging inspection market very competitive, Wells said Applied would enter only with a differentiated product, but he declined to give details.
A Discount to KLA, and a Fab List That Keeps Growing
The stock gets little credit for that growth. Applied trades at a forward P/E ratio of about 21, below Lam at 22, ASML (ASML) at 25 and KLA at 27, per TIKR. Some of KLA’s premium is earned: in July, KLA guided to a 62.5% non-GAAP gross margin for its September quarter, while Applied guided to about 50.4% for its October quarter.
Demand is the other open question. Asked by Evercore ISI’s Mark Lipacis what limits it, CFO Brice Hill named clean room as the primary constraint and added that “we track over 100 fab projects globally.” More than 10 new projects joined that list in each of the last two quarters, he said. Those are plans, not orders, but each new fab adds tools to inspect.
Needham cut its target to $580 from $740 on Oct. 16, though that still sits above the share price. TIKR’s Street mean is near $628, with 29 Buy, 5 Outperform and 6 Hold ratings.
TIKR tracks 40 analysts on Applied Materials. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Applied Materials, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Materials’ Analyst Ratings
TIKR Advanced Model Analysis
- Current Price: $375.58
- Target Price (Mid): ~$710
- Potential Total Return: ~89%
- Annualized IRR: ~17% / year
The TIKR model’s mid case puts Applied at around $710 by Oct. 31, 2030, an 89% total return from $375.58, or about 17% a year. Its 2025 to 2035 inputs assume revenue growth near 15% a year and a net margin near 33%. The mid case is a scenario, not a forecast.
Upside comes if process control keeps taking share. The main risk is that Applied’s undisclosed optical products fail to win share from an entrenched KLA, which would leave growth tied to the broader equipment cycle. The ~$710 target sits just below the stock’s peak, so the 2030 mid case is roughly what buyers paid at the top.
Conclusion
KLA reports its September quarter during the week of Oct. 26. Its inspection commentary should help show whether that market is growing fast enough to fit Applied’s 50% claim.
Applied’s Nov. 12 report then brings the January-quarter guide. That quarter runs 14 weeks instead of 13, per Applied, so the Street’s ~$10.7 billion estimate includes an extra week. Matching the weekly pace implied by the ~$10.3billion expected for October would take about $11.1 billion.
So what is Applied Materials stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
